(AP) Atlantic City, New Jersey Lawmakers from states that have legalized gambling are putting up guidelines for other jurisdictions that are thinking about permitting online gambling, such as a 15%–25% tax rate and a prohibition on credit card deposits.
Last week, the National Council of Legislators from Gaming States released model legislation for states considering allowing online gambling. Next week, in New Orleans, the group will hold its winter meeting, where the plan will be addressed.
It is intended to provide them with a foundation upon which to construct their own laws, integrating elements that have proven effective in other jurisdictions.
Currently, legal online casino games are available in seven U.S. states: Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, West Virginia, and Connecticut. Online poker is available in Nevada, but not online casino games.
Shaun Fluharty, a Democratic state delegate from West Virginia and president of the national lawmakers group, stated that although many states have been talking about this, they are struggling to see it through to completion. We’re attempting to compile a list of best practices for them.
Elaine Vallaster looks at the screen of her computer tablet while playing an internet slots game in Hazlet, N.J. on Nov. 24, 2023. (AP Photo/Wayne Parry)
Image courtesy of Wayne Parry/Associated Press
The new bill is based largely on existing laws in states like New Jersey, which has led the way in allowing and controlling online gambling since 2013. The politicians’ group received advice on the proposed legislation from David Rebuck, the former head of New Jersey’s Division of Gaming Enforcement.
“It’s good that 95 percent of this is similar to what we’re already doing in New Jersey,” he added. It’s a fantastic beginning that expands upon what is already established and functioning in other locations.
It demands stringent regulation of online gambling in order to safeguard customers and filter out dishonest people and businesses. If there isn’t already a government organization in place to regulate online gambling, the proposal also asks for its creation.
It would forbid using credit cards to pay for gaming accounts and cap deposits at $20,000 every 24 hours.
Discussions should begin with a proposed tax rate of 15% to 25%, according to Fluharty. Although that range is higher than what other states impose, it is still significantly lower than that of other states, like Pennsylvania, which levies 36% and 54% taxes on online sports betting and slot machine games, respectively.
According to Fluharty, the national average tax rate on internet gaming is 19%. They pay a 15% tax in West Virginia.
According to him, the idea was to avoid creating a barrier to market entry by imposing a high tax rate that would only be affordable for the largest corporations.
In April, Maryland’s attempt to legalize online gambling passed the House but failed to pass the Senate, according to Fluharty. He added that other states, such as Louisiana and Ohio, have been thinking about enacting their own laws pertaining to online gambling. While they did permit online sports betting, New York lawmakers have been unsuccessful in their attempts to pass online casino gambling with a 31.5% tax rate.
As budget concerns increase, Rebuck projected that more states will take online gaming seriously in the coming year.
“It’s pretty significant if they’re looking at this as a potential revenue driver,” he added, referring to the careful budgeting practices of certain governments.
Last year, New Jersey collected more than $414 million in taxes thanks to its 13% tax on internet sports betting and 15% tax on online casino games. Only the first ten months of this year have seen it come close to matching that number.
There is no attempt to establish national standards in the group’s plan. States control gambling to a significant extent, and previous attempts to pass national legislation on the subject have failed.
Donald Trump, the president-elect, has stated time and time again that he supports letting states make crucial decisions. With three casinos in Atlantic City, Trump was once a member of the gambling industry, but he did little to regulate it nationally during his first time in office.
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